16 Responses

Spot on Richard! There was me thinking that the Money Laundering legislation and regulations were intended to stop international flows of criminal assets from one jurisdiction to another! The legislation has demonstrably not been applied to the assets of dictators by our London banks and financial players. Surely this can’t be because the City was allowed by our government to turn a blind eye? Surely not!

I agree, Richard – lots of questions need to be asked here. Historically of course Britain has supported Middle Eastern dictators (among others), so it’s not surprising that the govt has taken no action to prevent dictators salting funds away by legal or illegal means.

In short because our governments have been essentially self interested for the past four decades and so the moment that it makes sense, both economically and politically, to ‘deal’ with money laundering is the moment it happens. Just as Cameron and Brown were so keen to praise the bankers before the economic collapse but bashed them with their best sticks the day after, successive British governments have spent years getting close to Arab dictators because it suited us but now, in the face of a popular movement, it makes sense to step away…

There is still questions to be answered, namely, did the banks, lawyers, accountants and other city operators undertake the legally mandated checks when these dirty assets were being washed clean in London? Did they submit Suspicious Activity Reports to the Serious Organised Crime Agency (SOCA)? If not, why not? The law requires them to do this, particularly with foreign politicians who are classified as “politically exposed persons” and who are subject to higher scrutiny.

@agn
sorry, I’ve just spotted Tim Worstall making the same comment – you may scrap this comment if you wish, as I know you might think I’m astro-turfing. I’m not, but this is, in any event, the actual answer.

I don’t suppose that Gaddafi had to sit down and fill in a money laundering and compliance questionnaire. Once a certain value is exceeded, these requirements mysteriously slip away. The gentlemen’s club allows these facilities for one another but when one breaks the unwritten rules, the facilities are quickly withdrawn.

Because you can’t just freeze a persons assets at the whim of the government. You have to demonstrate to the courts that the assets are the proceeds of crime, but foreign leaders (and ours) are granted immunity from prosecution (apart from war crimes etc.), which makes it difficult or maybe impossible to get a freezing order in the British courts.

One of the consequences of the government saying yesterday that they no longer recognised Gadhaffi is that by doing so they could freeze his assets.

I love it how right wingers say the law (government created, government enforced) means this is legitimate

It’s an odd libertarian argument, isn’t it?

I am arguing that the law should be changed

But it’s those who question the role of government that say the law that permits abuse that must be upheld come what may – without question as to its legitimacy being asked. Now why do they do that?

Could it be that this irrational belief in the law is evidence of moral judgement? Of belief in the importance of law? But belief that it must be used to support wealth – however acquired – at all costs? That’s what it seems like to me.

Richard Murphy :@MarkT
And the evidence is that the Swiss approach is wrong
In other words – we have to change international law to tackle this

The article quoted by MarkT illustrates the current international legal position (by definition they are not crooks so their assets cannot be the proceeds of crime), but I would have no problem with a UK law that prohibited a UK bank or financial institution from accepting deposits (other than short term deposits supporting comercial transactions) or managing investments on behalf of a foreign head of state

“Could it be that this irrational belief in the law is evidence of moral judgement? Of belief in the importance of law? But belief that it must be used to support wealth – however acquired – at all costs? That’s what it seems like to me.”

I am not a right winger, but you asked “Why now”? The answer to your question is because as the law (including international law) stands you can’t do anything else. That isn’t a reflection on anyone’s view of morality, simply on the practicality of confiscating anyone’s assets.

Not true. Banks and other financial institutions run pattern recognition software on all transactions they process. If a suspicious transaction is detected then the Bank has a legal obligation to submit a Suspicious Activity Report to the Serious Organised Crime Agency. SOCA must then, within 7 days, instruct the bank to proceed with the transaction. Within those 7 days the suspicious asset is effectively frozen.

The UK Money Laundering legislation and regulations stem from international treaties on the subject. They are attempts to ensure that criminally obtained assets have nowhere to hide. Politicians are classed as “politically exposed persons”, presumably in recognition that the assets of many politicians are frequently criminally obtained.